Article 29p. 29

NATIONAL INTERNAL REVENUE CODE TAXATION, TARIFF and CUSTOMS LAWS

computed on the basis of such new accounting period,

subject to the provisions of Section 47.

SEC. 47. Final or Adjustment Returns for a Period of

Less than Twelve (12) Months. -

(A) Returns for Short Period Resulting from Change of

Accounting

Period.

-

If

a

taxpayer,

other

than an

individual,

with

the

approval

of

the

Commissioner,

changes the basis of computing net income from fiscal

year to calendar year, a separate final or adjustment

return shall be made for the period between the close of

the last fiscal year for which return was made and the

following December 31. If the change is from calendar

year to fiscal year, a separate final or adjustment return

shall be made for the period between the close of the last

calendar year for which return was made and the date

designated as the close of the fiscal year. If the change is

from one fiscal year to another fiscal year, a separate final

or adjustment return shall be made for the period

between the close of the former fiscal year and the date

designated as the close of the new fiscal year.

(B) Income Computed on Basis of Short Period. - Where

a separate final or adjustment return is made under

Subsection (A) on account of a change in the accounting

period, and in all other cases where a separate final or

adjustment return is required or permitted by rules and

regulations prescribed by the Secretary of Finance, upon

recommendation of the Commissioner, to be made for a

fractional part of a year, then the income shall be

computed on the basis of the period for which separate

final or adjustment return is made.

SEC. 48. Accounting for Long-term Contracts. - Income

from

long-term

contracts

shall

be

reported

for tax

purposes in the manner as provided in this Section. As

used

herein,

the

term ' long-term contracts ' means

building, installation or construction contracts covering a

period in excess of one (1) year. Persons whose gross

income is derived in whole or in part from such contracts

shall report such income upon the basis of percentage of

completion. The return should be accompanied by a

return certificate of architects or engineers showing the

percentage of completion during the taxable year of the

entire work performed under contract. There should be

deducted from such gross income all expenditures made

during the taxable year on account of the contract,

account being taken of the material and supplies on

hand at the beginning and end of the taxable period for

use in connection with the work under the contract but

not yet so applied. If upon completion of a contract, it is

found that the taxable [net] income arising thereunder

has not been clearly reflected for any year or years, the

Commissioner may permit or require an amended return.

SEC. 49. Installment Basis. -

(A) Sales of Dealers in Personal Property. - Under rules

and regulations prescribed by the Secretary of Finance,

upon recommendation of the Commissioner, a person

who regularly sells or otherwise disposes of personal

property on the installment plan may return as income

therefrom in any taxable year that proportion of the

installment

payments

actually received in that year,

which the gross profit realized or to be realized when

payment is completed, bears to the total contract price.

(B) Sales of Realty and Casual Sales of Personality. - In

the case (1) of a casual sale or other casual disposition of

personal property (other than property of a kind which

would properly be included in the inventory of the

taxpayer if on hand at the close of the taxable year), for a

price exceeding One thousand pesos (P1,000), or (2) of a

sale or other disposition of real property, if in either case

the initial payments do not exceed twenty-five percent

(25%) of the selling price, the income may, under the rules

and regulations prescribed by the Secretary of Finance,

upon recommendation of the Commissioner, be returned

on the basis and in the manner above prescribed in this

Section.

As

used

in

this

Section,

the

term

' initial

payments ' means the payments received in cash or

property other than evidences of indebtedness of the

purchaser during the taxable period in which the sale or

other disposition is made.

(C) Sales of Real Property Considered as Capital Asset

by Individuals. - An individual who sells or disposes of

real property, considered as capital asset, and is otherwise

qualified to report the gain therefrom under Subsection

(B) may pay the capital gains tax in installments under

rules and regulations to be promulgated by the Secretary

of Finance, upon recommendation of the Commissioner.

(D) Change from Accrual to Installment Basis. - If a

taxpayer entitled to the benefits of Subsection (A) elects

for any taxable year to report his taxable income on the

installment basis, then in computing his income for the

year of change or any subsequent year, amounts actually

received during any such year on account of sales or

other dispositions of property made in any prior year shall

not be excluded.

SEC. 50. Allocation of Income and Deductions. - In the

case of two or more organizations, trades or businesses

(whether

or

not

incorporated

and

whether

or

not

organized in the Philippines) owned or controlled directly

or indirectly by the same interests, the Commissioner is

authorized

to

distribute,

apportion

or allocate gross

income

or

deductions

between

or

among

such

organization, trade or business, if he determined that

such

distribution,

apportionment

or

allocation

is

necessary in order to prevent evasion of taxes or clearly to

reflect the income of any such organization, trade or

business.

CHAPTER IX RETURNS AND PAYMENT OF TAX

SEC. 51. Individual Return. -

(A) Requirements. -

(1)

Except as provided in paragraph (2) of this

Subsection, the following individuals are required to

file an income tax return:

(a)

Every

Filipino

citizen

residing

in

the

Philippines;

(b) Every Filipino citizen residing outside the

Philippines, on his income from sources within

the Philippines;

(c) Every alien residing in the Philippines, on

income

derived

from

sources

within

the

Philippines; and

(d) Every nonresident alien engaged in trade or

business or in the exercise of profession in the

Philippines.

(2) The following individuals shall not be required to

file an income tax return:

(a)

An individual whose taxable income does

not exceed two hundred fifty thousand pesos

(P250,000) under Section 24(A)(2)(a): Provided,

That a citizen of the Philippines and any alien

individual engaged in business or practice of

profession within the Philippines shall file an

income tax return, regardless of the amount of

gross income; (as amended by RA No 10963)

(b)

An

individual

with

respect

to

pure

compensation income, [35] as defined in Section

32

(A)(1),

derived

from

sources

within

the

Philippines, the income tax on which has been

correctly

withheld

under

the

provisions

of

Section 79 of this Code: Provided, That an

individual deriving compensation concurrently

from two or more employers at any time during

the taxable year shall file an income tax return.

[36]

(c) An individual whose sole income has been

subjected to final withholding tax pursuant to

Section 57(A) of this Code; and

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